HOW ŠOLAK BECAME THE RICHEST SERB: Why were SBB's state competitors late discovering IPTV and cable TV? (6)
In a special series, Kurir reveals how exactly this controversial billionaire fulfilled his 'American dream' in the murky waters of the Balkan transition
The extent to which Telekom Srbija and The Serbian Postal Services were prevented from getting into the cable TV and internet retail sales business in the early 2000s – as a result of unforeseen circumstances and bad decisions – is best illustrated by the fact that Telekom went into internet retailing as late as 2006, and into cable TV retailing as late as December 2008.
Up until then, the competitors who were buying the internet wholesale from Telekom had already taken over many consumers, while Dragan Šolak's SBB and the providers forming a cartel with it had done the same in the area of cable television.
looked very different: privately-owned operators in Serbia had Telekom's infrastructure (utility tunnels and the intercity cable network) available to them, while at the same time being the sole retail market providers of television and even the internet. Privately-owned cable operators became very powerful in the market at the time – a fact that was evident from the user numbers. Given the nature of this line of business, where users find it difficult to change the service provider once they accept one, this proved very important for their further development and stable financial operation.
On top of a set of unfavourable circumstances, political limitations, and bad business decisions, Telekom faced a serious technological problem of inadequate infrastructure when it made the decision to base its network primarily on the copper-based transmission technology, which – in technical terms – has less bandwidth than optic fibre cables. This reduced the Telekom network's performance drastically, especially given that it was a time when HD channels were becoming a staple in cable TV offers and when households were using more and more TV sets as a result of lower and more affordable prices. It was only after 2012 – years behind its competitors – that Telekom started to lay optical cables, which the company had invested considerable funds in.
Due to these circumstances, SBB pushed Telekom out of the big cities in Serbia, reducing in the fall of 2018 the state operator's market share in TV distribution in Novi Sad and Kragujevac to an astonishing 2 percent, and became dominant even in the area of fixed telephony in these two cities. The situation in Belgrade was only slightly better, but Telekom's market share still did not go over 10 percent there. By pushing Telekom out of the major cities, SBB gained a dominant media position, with the other cable TV providers mostly forming part of an organized cartel that had to broadcast SBB's channels.
In addition to all this, SBB expanded its network without any permits whatsoever, by transferring cables from one building to the next, illegally using streetlights and utility poles, as well as by using all available public enterprise utility tunnels that it could run its cables through. However, with the exception of a general telecommunications activity permit, SBB did not obtain almost any of the cabling deployment permits, especially in densely populated urban areas, which resulted in horrific images from the central zones of big Serbian cities.
COMING UP NEXT: Making a private fortune by illegally using and usurping public resources